Posted on: Friday, May 20, 2005

Hawai'i economic forecast improves

By Sean Hao
Advertiser Staff Writer

State officials yesterday slightly raised estimates for Hawai'i job and income growth for 2005 based on the strength of the U.S. and Japan economies.

The latest Department of Business, Economic Development and Tourism report on the economy also forecast a slightly higher rise in inflation this year to 3.3 percent, which would match last year's rate.

Despite the rise in the cost of living, inflation-adjusted income is expected to rise 3 percent, while the number of jobs is forecast to grow by 1.9 percent. Both the income and jobs estimates were slightly higher than the agency forecast in March.

A record 7.3 million tourists are expected to visit the Islands this year, compared with a previous estimate of 7.2 million visitors. That equates to a 5.1 percent rise in visitor arrivals, compared with a March estimate of 3.4 percent growth for this year.

"Hawai'i continues to benefit from the combined effects of strong investment spending and export income from visitors and the federal government," said DBEDT Director Ted Liu in a written statement.

Expected economic growth this year of 3.4 percent in the United States and 1.1 percent in Japan were cited as factors contributing to Hawai'i's strong economy.

Gross state product, the value of all goods and services sold and the broadest measure of economic activity, is expected to increase by 3.1 percent this year, after adjusting for inflation, which was in line with the March forecast.

Reach Sean Hao at 525-8093 or shao@honoluluadvertiser.com.